The team at Latti Associates LLC won a ruling from the U.S. District Court in Massachusetts that can enable fishing vessel claimants to receive substantially more compensation after an injury where the vessel owner is held liable on a limited basis in a Petition for Limitation of Liability Proceeding. The court determined that the value of fishing permits—often worth millions—should be added to the value of the vessel itself when determining the Limitation of Liability Fund.
In this particular case, In re: Captain Juan, Inc., the value of the Limitation of Liability Fund increased from $1.17 million to $6.2 million with the included value of the permits. This represents a tremendous victory for victims, as well as their families facing the consequences of an unseaworthy vessel or negligence acts.
Federal admiralty law holds vessel owners liable when negligence or the lack of seaworthiness causes injuries or death. However, the Limitation of Liability Act enables owners to limit their liability to the value of the vessel and freight if they lacked privity or knowledge of the condition that caused the injury.
Since the law was enacted in 1851, courts have interpreted the value of a vessel to include more than just the hull. For instance, the U.S. Supreme Court held that value includes “all that belongs to the ship,” including “all the appurtenances.”
So the question at issue in the recent case was whether the fishing permit was an appurtenance of the vessel so that the value of that permit should be included in the value of hull, freight, and other factors traditionally included when computing a vessel’s value.
Writing for the Court, Chief Judge Patti B. Saris reviewed a prior First Circuit opinion that held that a fishing permit is an appurtenance of a vessel and that maritime liens can attach to a fishing permit as the “intangible rights granted by a permit … play a role similar to the vessel’s equipment.”
After hearing evidence for several days during the Limitation trial in In re: Captain Juan, Inc., Judge Saris held that the fishing permit at issue in the case to be an appurtenance primarily because the vessel could not operate to fulfill its role of fishing without the presence of the scallop permit on board. Specifically, the permit was issued to a vessel based on the scallop’s vessel history and specifications, it must be carried on board the vessel, is presumed to be transferred with the vessel and it must be included in cataloging “whatever is on board for the object of the vessel.” In addition, Judge Saris reasoned that it would be unfair to consider a fishing permit to be an appurtenance to enable shipowners to secure credit for a mortgage but not for the purpose of providing relief for injured mariners and their families.
Including the value of the fishing permit into the value of the vessel as a whole is important because it significantly increases the amount available for injured mariners or for families of deceased mariners. Without the permit, the value of the limited liability fund would have been based on freight value of approximately $66,000 and vessel value of $1.1 million. The permit was valued at $5 million. This increased the pool of funds for victims to well over $6 million.
No amount of money can make up for life or health lost due to wrongdoing at sea. However, recovering full compensation provides a measure of justice for victims and their loved ones, and it helps meet future needs.
The team at Latti Associates LLC understands how to use both law and facts to recover the right damage award for those harmed by negligence or unseaworthy vessels, dangerous crewmembers, and other wrongfully hazardous conditions. If you or a loved one suffered harm at sea that could have been prevented, contact our team to learn more about the ways we can assist.
